Independent Standard-Setting Boards

The International Auditing and Assurance Standards Board sets high-quality international standards for auditing, assurance, and quality control that strengthen public confidence in the global profession.

The International Accounting Education Standards Board establishes standards, in the area of professional accounting education, that prescribe technical competence and professional skills, values, ethics, and attitudes.

The International Public Sector Accounting Standards Board develops standards, guidance, and resources for use by public sector entities around the world for preparation of general purpose financial statements.

The International Auditing and Assurance Standards Board (IAASB) today released a Feedback Statementon the responses to its January 2011 Discussion Paper, The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications.The Discussion Paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users.Respondents from across the world, including regulators and oversight authorities, users and preparers, audit firms, and professional bodies provided thoughtful and informative input on issues around disclosures. The Feedback Statement provides an overview of the key messages heard and provides thoughts and recommendations on what can be done to address them.

“Disclosures have always been a critical component of financial reporting, but have become more so today as reporting increasingly incorporates fair value information, estimates involving judgment and complex measurements, and narrative disclosures of some of the risks and characteristics of companies and groups. Accordingly, investors and others look to disclosures for vital insights when making investment decisions,” said Prof. Arnold Schilder, Chairman of the IAASB. “This underscores the importance of the IAASB’s initiative to gain further knowledge and understanding of the issues and share what it has heard to stimulate further thinking and exploration in this area.”

The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain, including the impact of trends in financial reporting, applying materiality to disclosures, evaluating misstatements generated by disclosures, the availability of audit evidence to support disclosures, and work effort. To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. However, the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own, but would require international collaboration and cooperation, particularly with both the accounting standard setters—including the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB)—and regulators.

“Financial information that is reliable, understandable, and relevant is essential, as is the assurance on that information that auditors provide. We wholeheartedly agree with the respondents regarding the need for international collaboration and cooperation among standard setters; securities, audit, and prudential regulators; and other stakeholders. We must work together to develop effective responses to the issues being faced today,” notes James Gunn, IAASB Technical Director. “Like others, the IAASB has a role in enhancing the public’s confidence in disclosures as a priority—recognizing that individual initiatives must be towards finding a collective solution.”

About the IAASBThe IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by IFAC.

About IFACIFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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